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DATE: Thursday 7 May 2020, 10:00am - 11:00am- delivered via Zoom Video Conference
There have been numerous recent reports in the media concerning problems arising from the ownership of leasehold flats and houses.
What is a Leasehold Property?
It is a property which is owned by way of a lease and the owner of the lease is known as the leaseholder. The leaseholder has the right to own and occupy the property for a set number of years in accordance with the terms of the lease.
The leaseholder does not own the land upon which the property is built. The owner of the land is called the freeholder.
Leaseholds are commonly found when buying a flat. However, a house can also be sold as leasehold, usually through shared ownership schemes.
What has been happening recently?
In recent years a number of developers of new build properties have been selling newly built houses as leasehold. Following the completion of the new build development the developers have subsequently sold the freehold to the house to third parties, without even consulting the leaseholder.
The sale of the freehold by a developer to third party, although receiving bad press from the media, is legal.
What is the problem?
When a developer sells the freehold to a third party, that third party is buying the freehold solely as an investment. The third party will then charge leaseholders a much higher price should will they wish to buy the freehold. This in turn may put off potential future buyers of the leasehold property.
Are there any other potential problems with leaseholds?
What can a Buyer who is considering purchase a leasehold property do?
Ensure you receive comprehensive legal advice, explained in plain English, if you are considering buying a leasehold property.
Not all leasehold properties are bad. There are many leasehold properties with happy leaseholders occupying them. The purpose of this article is to highlight a number of leasehold property issues which may cause concern.
If you would like assistance in purchasing a leasehold property please contact our Residential Property team.